INDUSTRY BRIEFS

Sept. 4, 1995
Enterprise Oil Exploration Ltd. is drilling Seychelles' first well in about 15 years. It spudded 1 Constant Bank wildcat, projected to 3,200 m in 51 m of water. Site is 200 km south-southeast of Seychelles' main island, Mahe. It is the first well drilled off Seychelles since Amoco Corp. drilled three wells in 1980-81 about 320 km northwest of Enterprise's drillsite. Elf Aquitaine

Exploration

Enterprise Oil Exploration Ltd. is drilling Seychelles' first well in about 15 years. It spudded 1 Constant Bank wildcat, projected to 3,200 m in 51 m of water. Site is 200 km south-southeast of Seychelles' main island, Mahe. It is the first well drilled off Seychelles since Amoco Corp. drilled three wells in 1980-81 about 320 km northwest of Enterprise's drillsite.

Elf Aquitaine signed a protocol with State Oil Co. of the Azerbaijan Republic (Socar) covering exploration in the southern Caspian Sea off Azerbaijan. Plans call for Elf to take over part of Socar's interest in a 50-50 exploration venture with Chevron Corp. covering the Caspian block. The protocol could lead to broader cooperation, with Elf suggesting Socar join it in African projects.

Apache Cote d'Ivoire Petroleum and partners signed an agreement with Cote d'Ivoire's state owned Petroci covering exploration on the 930 sq km C1-27 block off Cote d'Ivoire, which includes Foxtrot gas field. During an initial 2 year term, Apache will drill a wildcat to probe a possible oil leg underlying Foxtrot and acquire 500 line km of seismic data. Foxtrot, discovered in 1981, holds reserves of more than 300 bcf.

Cogeneration

Union Carbide Corp. let contract to Fluor Daniel for engineering, construction, and start-up of a 220,000 kw, combined cycle, cogeneration power plant at its Taft, La., olefins complex. The plant will provide electrical power and process steam for production units at the complex, including the adjoining Star polyethylene plant. The cogeneration unit is scheduled for completion in early 1997.

Refining

Petroleos de Venezuela SA approved subsidiary Corpoven SA's proposed $800 million modernization of its 194,000 b/d Puerto La Cruz refinery in eastern Venezuela. Although details aren't disclosed, the project will enable Corpoven to produce unleaded gasoline and low sulfur diesel. Corpoven now must fine tune estimates, start engineering, and submit detailed plans to Pdvsa for each phase of the project.

Kazakhstan's state oil company let a $480 million contract to Japan's Sumitomo Corp. and Canada's SNC Lavalin Group Inc. to build a 60,000 b/d refinery in Zhanazhol oil field near Aktyu- binsk. Kazakhstan asked Japan, Canada, Belgium, and the U.S. to extend syndicated loans to finance the project.

Exxon Co. U.S.A. let contract to Jacobs Engineering Group Inc., Baton Rouge, to provide engineering and design services for a $19 million debottlenecking of a crude train at its 424,000 b/d Baton Rouge refinery to boost processing of heavier, more sour crudes.

Drilling-production

Hibernia project partners let a 5 year, $200 million (Canadian) contract to Schlumberger Canada Ltd., Calgary, for drilling and servicing operations for Hibernia oil field development off Newfoundland. Schlumberger will open a permanent office in Newfoundland and transfer some employees from Calgary.

Clyde Petroleum plc, Ledbury, U.K., sold 3.5% interests in three U.K. North Sea blocks to Oranje-Nassau Energie Pte. Mij., Amsterdam. Clyde will receive 12.25 million ($18.99 million) in cash plus Oranje-Nassau's 12.5% interest in Dutch offshore Block Q/4a, operated by Clyde. The U.K. blocks involved are 9/18a, 9/18b and 9/18c. They include Gryphon field, in which Clyde retains a 21.5% interest.

Command Petroleum Ltd., Sydney, increased its estimate of remaining proved and probable crude oil and condensate reserves in Ravva oil and gas field off India by 39.8 million bbl to a total of 139.8 million bbl, of which 67.1% is proved. Remaining gas reserves are pegged at 72.409 bcf. Command as operator is further developing the field under a $200 million project with state owned Oil & Natural Gas Corp. Ltd. and other partners. Production is to plateau at 35,000 b/d by yearend 1996.

Amerada Hess Ltd. started up Fife oil field in the U.K. North Sea on Blocks 31/26a, 31/27a, 39/1, and 39/2 near the U.K.-Denmark line. Production is expected to peak at more than 40,000 b/d. Two producers and one injector are tied back to a floating production storage and offloading vessel converted from a tanker, the first such conversion in the North Sea.

Norway's Den norske stats oljeselskap AS signed an $11.6 million agreement with Smedvig Technology, a unit of Smedvig AS, Stavanger, for downhole monitoring of offshore wells. The contract runs for 3 years with a 2 year extension option.

Clyde Petroleum plc, Ledbury, U.K., announced first production from Loon op Zand onshore gas field in Netherlands. The discovery well, which flowed almost 22 MMcfd of gas on test, was tied back through a 12 km, 10 in. pipeline to Clyde's gas processing plant in North Waalwijk field. Clyde plans to place nearby Sprang discovery on production in 1996 and spud a new pool wildcat 14 km south of Loon op Zand at Hilvarenbeek within the next few weeks.

Abu Dhabi Co. for Onshore Oil Operations will boost productive capacity in giant Bu Hasa oil field by about 10% from the current 500,000 b/d once it commissions new high pressure gas compression and injection facilities by October. Gas lift is slated for 15 wells targeting the Shuaiba reservoir. Babcock Energy Ltd. installed the gas lift facilities under a $50 million contract.

Oklahoma Corporation Commission raised the allowable for Oklahoma unallocated gas wells to the greater of 45% of calculated absolute open flow or 1 MMcfd for fourth quarter 1995. That's up from 35% or 750 Mcfd in the second and third quarters and returns to the level effective in the 1993-94 and 1994-95 heating seasons.

Companies

The board of Home Oil Ltd., Calgary, recommended that stockholders not tender shares to a bid by Anderson Exploration Ltd. until further notice. The board noted that while the $1.22 billion Anderson purchase offer tops a $1.16 billion (Canadian) offer by Amoco Canada Ltd., Home continues to talk to other parties (OGJ, Aug. 21, p. 32). Both offers expire Sept. 7, and the Home board will make a recommendation by then.

Torch Energy Advisors Inc. agreed in principle with Unocal Corp. on the sale price of Unocal's oil and gas production in California. Torch expects to pay more than $500 million cash for the properties plus possible contingency payments starting in 1998, depending on oil prices. Involved are 69 oil and gas fields, including 11 producing platforms off California. Unocal's net production from the leases is about 29,000 b/d of oil and 67 MMcfd of gas. In July 1994, Torch purchased Unocal's interest in Point Pedernales Unit off California and several onshore fields in Santa Barbara County (OGJ, July 4, 1994, p. 36)

Enterprise Oil plc, London, sold to institutional investors its 9.8% interest in Lasmo plc, also of London, for $257.9 million. Enterprise will use the cash to help fund this year's exploration and production spending, which is expected to exceed $500 million. The sale marks Enterprise's final withdrawal from Lasmo stock after its failed takeover bid last summer (OGJ, May 30, 1994, p. 36).

Apache Corp., Houston, agreed to buy all the assets of Aquila Energy Resources for about $198 million effective July 1, with closing expected late this month. Involved are proved and probable reserves estimated at 236 bcf of gas equivalent under about 115,000 developed and 26,000 undeveloped net acres of leases, mainly in Oklahoma's Anadarko basin and in the Gulf of Mexico. The deal also involves a 5 year, 4 month premium gas contract and nonoperated interests in four gas processing plants. Aquila Energy Marketing Corp. will buy 20-25 MMcfd of gas from Apache at an initial price of $2/Mcf, rising to $3.20/Mcf by 2000.

Enron Capital & Trade Resources Corp., Houston, agreed to pay $8/share, or $196.8 million, for all outstanding common stock of Coda Energy Inc., Dallas. In addition to signing a definitive merger agreement, Enron prior to closing wants Coda to sell its Taurus Energy Corp. gas gathering and processing unit under acceptable terms. Coda, evaluating an offer for Taurus while it awaits approval of the deal by shareholders, wants assurances of continuing roles for certain managers.

Mitchell Energy & Development Corp., The Woodlands, Tex., will take a $73 million after tax writedown in its fiscal second quarter related to the sale of real estate near The Woodlands. At the same time, Mitchell will record a $59 million second quarter after tax gain from the early termination of its North Texas gas sales contract with Natural Gas Pipeline Company of America (OGJ, July 24, p. 23).

Enterra Corp., Houston, received a payment of $14.25 million cash from Kuwait Oil Co. in full settlement of the parties' dispute related to work performed in Kuwait during 1992-93 after the Persian Gulf war.

Gas processing

Cornerstone Natural Gas Inc. restarted its refurbished Iola gas processing plant in Grimes County, Tex. Cornerstone hiked capacity at the plant to 40 MMcfd from 30 MMcfd. At capacity, natural gas liquids recovery will be 120,000 gal/day. Cornerstone expects at first to process 15-20 MMcfd, with volumes increasing through 1996. The plant was shut down in 1988 as production fell from old wells. A recent surge in exploration and development in the region prompted the expansion and reopening.

Pipelines

Edison Pipeline & Terminal Co., a regulated division of Southern California Edison, signed a contract with Cajon Pipeline Ltd. to develop a 120,000 b/d crude oil pipeline project utilizing part of Edison's existing oil pipeline system in southern California. The pipeline is intended to transport San Joaquin Valley and offshore crude to Los Angeles area refineries (see map, OGJ, Feb. 15, 1993, p. 40). Cajon wants to lay a segment linking an existing pipeline near Barstow, Calif., with Edison's pipeline in San Bernardino County.

Williams Natural Gas Co., Tulsa, plans a $13.7 million pipeline project to increase gas deliveries to City Utilities, Springfield, Mo. Williams provides 102 MMcfd of transportation capacity to Springfield through a 16 in. line at present. Planned for completion by Nov. 1, 1996, is construction of 28 miles of 20 in. line. Springfield committed to another 23 MMcfd in purchases.

J. Ray McDermott SA, New Orleans, began laying Leviathan Gas Pipeline Partners LP's Poseidon sour crude pipeline system in the Gulf of Mexico, involving 118 miles of 16 and 20 in. line. The system runs from a platform on Ship Shoal Block 332 to a site on Garden Banks Block 72, where a platform is to be installed in October. Leviathan expects to start shipping crude in November through Poseidon's first phase facilities. The system ultimately will consist of 200 miles of 16, 20, and 24 in. line with capacity of more than 400,000 b/d of sour crude from deepwater and subsalt fields in the gulf.

Portland Natural Gas

Transmission System signed two shippers, Northern Utilities Inc. and Bay State Gas Co., that will account for more than 50% of capacity on its proposed $220 million, 200 MMcfd, 250 mile, 20 in. gas pipeline from the Canadian border in Northeast Vermont to Portland, Me., and later to Haverhill, Mass. Start-up is slated for early 1998. Capacity will be expandable to more than 300 MMcfd.

Phillips Petroleum Co. and Enron Corp. agreed to settle U.S. Federal Trade Commission concerns related to the proposed acquisition by Phillips unit GPM Gas Corp. of Enron gas gathering affiliates systems in Kansas, Oklahoma, and Texas (OGJ, Dec. 5, 1994, p. 40). Under the accord, Enron will exclude from the sale 830 miles of pipeline and related assets in the Oklahoma and Texas panhandles. In addition, the two companies must notify FTC the next 10 years of any gas gathering transactions in the region.

Petrochemicals

Union Carbide Corp. licensed the Carbide/Davy low pressure oxo technology to Romania's Oltchim SA to produce oxo alcohols at a 60,000 metric ton/year butyraldehydes plant Oltchim will build at its Rimnicu Vilcea petrochemical complex. Start-up is slated for late 1997. The new process will replace Oltchim's current cobalt catalyst process. Aldehydes produced in the new oxo unit will be converted mainly to 2-ethylhexanol.

China AmericanPetrochemical Co. Ltd. (Capco), Taipei, started up a $54.5 million Catox treatment system at its 1.5 million metric ton/year Kaohsiung, Taiwan, purified terephthalic acid (PTA) plant. The system, installed on all five Capco PTA production trains, catalytically treats vent gases to convert organic pollutants into carbon dioxide and water.

Capco pulled out of Chinese Petroleum Corp.'s (CPC) proposed $7.5 billion naphtha cracking/refining complex, Taiwan's eighth. Capco had sought a holding of 15%, but when the project was disclosed, Capco was included in a group of 16 companies holding a combined 20%. Dairen Chemical Corp. also recently withdrew from the CPC project (OGJ, Aug. 14, p. 23).

Gas utilities

Algeria's state gas utility Sonelgas and state oil company Sonatrach signed a 30 year contract under which Sonatrach will supply Sonelgas 350-420 bcf/year of natural gas. The first phase covers 5 years and 2.03 tcf of gas delivered for use by power plants, industrial users, and residences.

Copyright 1995 Oil & Gas Journal. All Rights Reserved.